Chapter 7 Land Price Trends in 2007 as Indicated by Published Land Prices for 2008

　　　According to published land prices as of January 1, 2008, both residential and commercial land prices in Japan rose for the second straight year on a national average basis, during the year from January 2007. Although the average price in the three largest metropolitan regions rose more steeply than in the previous year, the margin of the rise narrowed in some sample sites within those regions, mainly urban areas. Meanwhile, the margin of the price drop in regions other than the three largest metropolitan regions narrowed, and prices continued to decline in most sites.

1. In the three largest metropolitan regions and major cities of other regions, the land price rise in urban areas spread to surrounding areas. However, the price rise slowed in the second half of the year.

2. In other regions, the number of sites registering a price rise increased in areas where convenience and profitability improved due to urban and transport infrastructure development. In addition, in more than half of the sites registering a price drop, the margin of drop narrowed. However, in non-metropolitan regions as a whole, land prices continued to decline in more than half of the sample sites.

　　　As shown above, the published land prices indicated continued signs of a recovery in overall land prices, and the pace of the rise slowed in the second half of last year, mainly in the three largest metropolitan regions.
As for the future trend of land prices, attention should be paid to the effects of the economic condition, the movement of interest rates, the supply-demand balance and the activities of domestic and foreign investors.

Chart 7-1-1 Changes in Published Land Prices (National Average)
Source: "Published Land Prices," Ministry of Land, Infrastructure, Transport and Tourism

Chart 7-1-2 Land Price Changes by Prefecture
Source: "Published Land Prices," Ministry of Land, Infrastructure, Transport and Tourism
1. △ indicates a price fall.
2. Percentage changes represent simple average changes for the same standard land sites.
3. The three largest metropolitan regions are the Tokyo, Osaka and Nagoya regions
Tokyo region: cities, wards, towns and villages including existing built-up areas and suburban development and redevelopment areas based on the "National Capital Region Development Act"
Osaka region: cities, towns and villages including existing built-up areas and suburban development and redevelopment areas based on the "Kinki Region Development Act"
Nagoya region: cities, towns and villages including existing urban development areas based on the "Chubu Region Development Act"
4. Other regions consist of all regions other than the three largest metropolitan regions.

1. Overview of the Tokyo Region

(1) Residential land
　　　In the Tokyo region, the average residential land price rose 5.5% marked the second consecutive annual increase.
　　　In Tokyo’s 23 special wards, prices jumped more than 10% due to such factors as the people’s renewed preference for urban centers as the location of residence, strong demand for condominiums and active real estate investment, with the margin of the rise widening compared with the previous year in both the 23 special wards and other urban areas. Meanwhile, the number of sites registering a rise of more than 25% decreased to three, located in Minato and Shibuya Wards. The cities of Musashino, Tachikawa and Fuchu, located along a key railway line in suburban Tokyo, as well as the cities of Kawasaki, Yokohama, Chiba and Saitama, saw their land prices rise due to increased demand for condominiums in areas with a superior living environment featuring close proximity to railway stations and a recovery in overall housing demand.
　　　In the Tokyo region’s outlying areas, the number of sites registering a price rise increased sharply due to the housing demand recovery. However, prices in some areas continued to drop, albeit less steeply than in the previous year, because of such factors as poor access to schools and business offices, an excessive supply of residential land and weak demand.

(2) Commercial land
　　　The average commercial land price in the Tokyo region climbed 12.2% representing the third consecutive rise.
　　　Some sites in advanced commercial areas of Minato, Shibuya, Shinjuku and Toshima Wards recorded a price rise of more than 30%. The sharp increase resulted from an improvement in the profitability of commercial real estate due to higher rents reflecting strong office demand, active real estate investment, urban redevelopment and high expectations for the opening of a new subway line, as well as from the heightened prosperity of these areas due to increased concentration of commercial facilities. However, in most sites, the pace of the price rise has slowed down since the second half of last year.
　　　In suburban Tokyo, Tachikawa, Musashino and Fuchu Cities, which are located along key railway lines and which have a huge base of commercial customers in neighboring areas, registered a commercial land price rise as the prosperity and profitability of their commercial real estate increased due to improvement and expansion of commercial facilities.
　　　In Yokohama, Kawasaki and Kawaguchi Cities, the margin of the price rise widened as the prosperity and profitability of their commercial real estate improved due to redevelopment projects around railway stations.
　　　Urayasu, Ichikawa and Chiba Cities, all in close proximity to central Tokyo, recorded overall commercial land price rise for the third consecutive year. Saitama City also posted an overall rise. These hikes are attributable to expectations that growing demand for and construction of condominiums in these cities could attract consumers.
　　　Other major cities that serve as the cores of commercial zones posted a steeper price rise than in the previous year, and cities where there is a relatively large population around railway stations also registered a rise.
　　　In the Tokyo region’s outlying areas, the number of sites recording a price rise increased sharply amid expectations for increased customer visits, due to a population growth attributable to strong demand for condominiums in areas close to railway stations. However, prices in some areas continued to decline, albeit at a slower pace. This may have been due to old commercial facilities in these areas losing customers to new large suburban facilities.

Chart 7-1-3 Land Price Changes in Tokyo Region by Area
Note 1. Price changes in 2007 represent those for pre-merger municipalities .
Note 2. "Central wards" include Chiyoda, Chuo, Minato, Shinjuku, Bunkyo, Taito, Shibuya and Toshima."Southwestern wards" include Shinagawa, Meguro, Ota, Setagaya, Nakan, Suginami and Nerima."Northeastern wards" include Sumida, Koto, Kita, Arakawa, Itabashi, Adachi, Katsushika and Edogawa.　

2. Overview of the Osaka Region

(1) Residential land
　　　Residential land prices in the Osaka region recorded an overall 2.7% rise, marking the second consecutive increase.
　　　In major cities of this region, such as Osaka, Kyoto and Kobe, prices continued to increase. Although prices jumped more than 15% in some sites in traditional prime residential areas with excellent living environments in Hyogo Prefecture, such a sharp rise was seen only in a small portion of the Osaka region.
　　　Ashiya and Nishinomiya Cities in the Hanshin area, as well as suburban cities of Minoh and Toyonaka, recorded a higher rise than in the previous year, due to increased demand for houses in locations that offer close proximity to the center of Osaka, convenience for day-to-day life and superior living conditions.
　　　In the suburbs of Kyoto City, Kyotanabe and Uji Cities recorded a steeper rise than in the previous year as demand emerged for locations that offer excellent convenience and living conditions.
　　　In Nara Prefecture, Nara and Ikoma Cities, located along Kintetsu Railway’s Nara line posted the first rise in their average residential land prices in 17 years, due to the emergence of demand for houses in areas that offer excellent convenience and living conditions.
　　　In the Osaka region’s outlying areas, the number of sites registering a price decline decreased and the margin of decline narrowed in most of these sites.

(2) Commercial land
　　　Commercial land prices in the Osaka region recorded an overall rise of 7.2%, representing the third consecutive rise, yet the pace of the rise slowed compared with the previous year. While the number of sites registering a rise increased, the margin of the increase in commercial zones in Osaka, Kyoto and other cities narrowed.
　　　The average price in Osaka City increased less steeply than in the previous year, with the pace of the increase slowing down particularly sharply in Kita and Chuo Wards. Moreover, although some areas around Osaka Station and Midosuji Street scored a price hike exceeding 30%, such a sharp rise was seen in only a small portion of the Osaka region.
　　　In Kyoto City, the average price rose less steeply than in the previous year, with the pace of the rise in Nakagyo and Shimogyo Wards slowing particularly sharply. Meanwhile, Uji and Nagaokakyo Cities, both located near Kyoto City, registered a sharper price rise than in the previous year as a result of improved convenience attributable to development projects near railway stations.
　　　In Hyogo Prefecture, Kobe City registered a rise in the average commercial land price for the second consecutive year, as prices continued to rise sharply in the center of the city due to growing office demand on the back of an economic recovery. The Hanshin area recorded a price rise for the third consecutive year because of a continued rise in cities that offer close proximity to Osaka and excellent traffic convenience.
　　　In Nara Prefecture, the centers of Nara City and Ikoma City recorded the first price hike in 17 years amid a recovery in tourism demand.
　　　In the Osaka region’s outlying areas, the number of sites posting a price drop decreased. Particularly notable was that prices either rose or remained flat in all sample sites in Osaka Prefecture. In other prefectures, the number of sites registering a price decline decreased and the margin of the decline narrowed in most of these sites.

Chart 7-2-1 Land Price Changes in Osaka Region by Area
Note 1. Price changes in 2007 represent those for pre-merger municipalities .
Note 2: "Northern Osaka" includes Toyonaka City, Ikeda City, Suita City, Takatsuki City, Ibaraki City, Mino-o City, Settsu City, Shimamoto Town, Toyono Town and Nose Town. "Eastern Osaka" includes Moriguchi City, Hirakata City, Yao City, Neyagawa City, Daito City, Kashiwara City, Kadoma City, Higashi Osaka City, Shijonawate City and Katano City. "Southern Osaka" includes Osaka Prefecture other than Osaka City, Northern Osaka and Eastern Osaka.
Note 3: The "Four eastern wards of Kobe City" are Higashinada, Nada, Hyogo and Chuo.
Note 4: The "Hanshin area" includes Amagasaki City, Nishinomiya City, Ashiya City, Itami City, Takarazuka City, Kawanishi City, Sanda City and Inagawa Town.
Note 5: The "Five central wards of Kyoto City" are Kita, Kamigyo, Sakyo, Nakagyo and Shimogyo.

3. Overview of the Nagoya Region

(1) Residential land
　　　Residential land prices in the Nagoya region registered an overall rise of 2.8%, marking the second consecutive increase.
　　　Nagoya City posted the third straight rise, with the outlying wards of Moriyama, Midori and Tenpaku showing a particularly strong uptrend, as demand grew in those areas of these wards that offer excellent convenience and living conditions amid the economic recovery. On the other hand, in some sites in the central wards of Higashi and Showa, where prices started to rise earlier than elsewhere, the pace of the rise slowed down. Many municipalities registered overall rises in the Nishi Mikawa area, as well as the Eastern Owari district, located between Nishi Mikawa and Nagoya City, as the number of sites registering a rise increased due to the continued firmness of housing demand stemming from a robust local economy.
　　　Some sites in Nagoya City recorded price hikes exceeding 15%. These were limited to residential zones in the center of the city that offer excellent convenience as well as prime residential areas whose living environments are superior.
　　　In Mie Prefecture, some sites in Kuwana City posted a price rise amid a recovery in demand attributable to their proximity to the center of the city and Nagoya and their excellent living environment.
　　　In the Nagoya region’s outlying areas, prices continued to decline, mainly because demand for residential land remained relatively weak due to poor traffic access to Nagoya City and the weakness of the local economy.

(2) Commercial land
　　　Commercial land prices in the Nagoya region registered an overall 8.4% rise, denoting the third consecutive rise.
　　　In Nagoya City, prices rose more than 30% in sites surrounding the Nagoya station where the concentration of offices increased due to the construction of high-rise buildings and in sites located in the center of the city where the prosperity and profitability of commercial real estate improved. However, some sites in areas where prices had started to rise earlier than elsewhere saw a slower rise than in the previous year.
　　　The average prices in Toyota and Anjo Cities rose, mainly because of a robust local economy.
　　　In Mie Prefecture, Yokkaichi and Kuwana Cities registered a rise in the average price, as profitability improved due to increased concentration of commercial facilities, following redevelopment projects carried out around railway stations.
　　　The Nagoya region's outlying areas saw commercial land prices continue to fall, though at a slower pace, due perhaps to the fact that old commercial facilities in these areas lost customers to new large suburban facilities.

Chart 7-3-1 Land Price Changes in the Nagoya Region by Area
Note 1. Price changes in 2007 represent those for pre-merger municipalities .
Note 2. The areas in Aichi Prefecture are as follows:
The "Owari area" includes Ichinomiya City, Seto City, Kasugai City, Tsushima City, Inuyama City, Konan City, Komaki City, Inazawa City, Owariasahi City, Iweakura City, Toyoake City, Nisshin City, Aisai City, Kiyosu City, Kitanagoya City, Yatomi City, Togo Town, Nagakute Town, Toyoyama Town, Haruhi Town, Oguchi Taown, Fuso Town, Shippo Town, Miwa Town, Jimokuji Town, Oharu Town, Kanie Town and Tobishima Village.
The "Nishi Mikawa area" includes Okazaki City, Hekinan City, Kariya City, Toyota City, Anjo City, Nishio City, Chiryu City, Takahama City, Isshiki Town, Kira Town, Hazu Town, Kota Town and Miyoshi Town.
The "Chita area" includes Handa City, Tokoname City, Tokai City, Obu City, Chita City, Agui Town, Higashiura Town, Minamichita Town, Mihama Town and Taketoyo Town.

4. Overview of Other Regions
(1) Residential land
　　　As a whole, the regions other than the three largest metropolitan regions posted an overall decline in residential land prices of 1.8%, against a drop of 2.7% in the previous year. The margin of decline narrowed for the fourth consecutive year.
　　　Among the cities in these non-metropolitan regions, Sapporo posted an overall increase for the third consecutive year and Fukuoka recorded a rise for the second straight year. Meanwhile, Sendai scored the first rise in 17 years, while the average price in Hiroshima remained flat. Some sites in Sendai’s Aoba Ward posted a rise of more than 20%.
　　　Some other major cities in these non-metropolitan regions saw residential land price hikes as a result of community building efforts and urban and transportation infrastructure development. Otsu and Okayama posted a rise for the second consecutive year, while Shizuoka and Hamamatsu recorded their first rise in the average price since they became ordinance-designated cities. In addition, some sites in Maebashi, Niigata, Takamatsu and Kumamoto, among other cities, also registered a price rise.
　　　Among other cities in the non-metropolitan regions, Kusatsu and Ritto Cities, both located in Shiga Prefecture, posted a rise for the second consecutive year thanks to a population growth, strong condominium demand and transport infrastructure development, and Tsukuba City, Ibaraki Prefecture and Kasuga City, Fukuoka Prefecture also recorded an increase. Kutchan Town in Hokkaido, and Ishigaki City and Onna Town in Okinawa Prefecture scored an overall price rise due to increased tourism demand. Some sites in Tomakomai recorded a rise because of the construction of a plant and the opening of large-scale commercial facilities.
　　　In regions other than those cited above, residential land prices were still falling as the declining population eased the supply/demand relationship mainly in suburban areas.

(2) Commercial land
　　　Together, regions other than the three largest metropolitan regions posted an overall decline in commercial land prices of 1.4% against 2.8% in the previous year. The margin of the decline narrowed for the fourth consecutive year.
　　　Among major cities, Sapporo scored an overall price rise for the third consecutive year, while Sendai, Hiroshima and Fukuoka registered an increase for the second straight year. Some areas in Sapporo, Sendai and Fukuoka posted a rise of more than 30% for the second consecutive year, due to the increased prosperity and profitability of their commercial real estate attributable to active real estate investment and strong office demand.
　　　Among other major cities in the non-metropolitan regions, Shizuoka, Hamamatsu, Otsu, Okayama and Matsuyama registered a rise in their average price for the second consecutive year, due to redevelopment of urban centers and transport infrastructure development, while the average price rebounded in Kanazawa, Kumamoto and Kagoshima. Naha and Ishigaki in Okinawa Prefecture registered a rise due to increased tourism demand. Meanwhile, some sites in Takasaki, Niigata, Toyama, Higashihiroshima and Takamatsu recorded an increase thanks to urban redevelopment projects and zone readjustment projects around railway stations.
　　　Hakodate posted a price rise because of expected demand for hotels after the planned opening of a new Shinkansen line.
　　　In regions other than those cited above, commercial land prices continued to fall, due to the withdrawal of large core facilities and the construction of large new suburban commercial facilities, which have taken business away from existing commercial areas.

Chart 7-4-1 Land Price Changes in Non-Metropolitan Regions



Note: Price changes in 2007 represent those for pre-merger municipalities.

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